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How Much Do You Think You Can Raise Next Year? A Proven Budgeting Process


We know the pressures fundraisers feel at budgeting time. Your mission is bold. Your community needs what you offer. Your clients and colleagues and volunteers have big ideas for how they can do more and do better – if they only had the money.


You want to tell them, “Sure, if that’s what it will take to do the work, that’s what we’ll raise.”


We want you to say that, too. But only if it’s based on real fundraising strategies you have the people and resources to carry out. It isn’t actually helpful to put unrealistic numbers in your organization’s budget. It’s pretty risky, in fact. And often, it’s out of line with your values.

So, how do you figure out how much fundraised money to put in your organization’s budget?


Break your projections down by strategy then add them up:

One-to-many strategies (e.g. appeals, events)

+ one-to-one individual strategies (major giving)

+ foundation and corporate

= how much to put in the budget

 

One-to-Many Strategies


Your budget projections for direct mail, email campaigns, other online giving, and events can be based on an analysis of your results in recent years. Follow the trend lines and consider the adjustments you’ll make to bring in new donors, retain current donors, get higher response rates, and increase average gifts.


Modest growth of three to five percent in contributions from your one-to-many fundraising strategies is good—especially if it means you’re moving some donors into your one-to-one fundraising program (commonly known as major gifts) and replacing them with new donors through your base building work (sometimes referred to as donor acquisition).


One-to-One Strategies


To project contributions from individual donors in your major giving program, we recommend that relationship managers create a cultivation plan for each donor they’re working with. (The relationship manager might be a gift officer, the executive director, another fundraiser, or a volunteer – it’s whomever is responsible for engaging each donor.) In each cultivation plan, include the amount you plan to ask for and the amount you expect they’ll give, based on what you know right now. Add up all your planned asks and total up all your expected amounts. This range represents your potential. We recommend budgeting 50-60 percent of the total you expect donors in one-to-one giving programs to give, but you might tinker with the percentage based on how well you know your donors and how much risk your organization can tolerate.


We use a similar approach for projecting foundation and corporate giving. First, look at your current funders. Set aside those that you don’t expect to renew their support. (You know, those one-time grants.) For those that are likely to renew, determine how much you’re going to ask for. Add up the value of the grants you expect to renew and include 90 percent of the total in the budget.


Do the same for your known prospective grantors – for the grant makers you have allocated time to build relationships and prepare proposals. Add up the amounts you plan to ask each grant maker for and include 30 to 50 percent of the total in your budget. If you have time allocated to discover prospects during the year, you might include some amount for unknown prospects in your budget – but only if you’ve really allocated staff time to do the research, relationship building, and applying.

Now add it up. You have the projection for your budget.


We know, in most cases, this isn’t the end of the process. While you’ve been thinking through your strategies and donors and estimating how much the organization can expect in contributions, you and others have also been estimating how much it’s going to cost to fulfill your mission in the coming year. And rarely do the estimated income and estimated expenses match on the first try.


There’s a good chance you’ll be asked to go back and see if there’s anything you missed, if there’s any way contributions could be higher. Do that work. Think about it. Ask yourself if you’re approaching the budget through a lens of abundance. There may be something you missed, or you or a colleague might have a promising idea that would increase your estimate.


But keep it real.


It’s important that there be a strategy and the people and time and other resources to execute that strategy for each of the dollars you include in the budget. When there isn’t, when your budget is based on hope alone, the results can be costly. Your organization faces greater financial risk. And, more importantly, you put your fundraisers at risk. At risk of burning out from the pressure of unrealistic expectations.


We know budgets are challenging. It’s a heavy lift and can be fraught with difficult choices and conversations. We’re here for you! Whether you need a fundraising strategist, a development plan, or help thinking through an issue, we’ll be your partner. Check out our Values-Based Fundraising page for more info about our services and schedule a free 15-minute consultation to learn more.

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